Fife College Didn't Want To "Lose" Excess Funding

Fife College says it has kept £1.96million from the Scottish Government because it didn't want to lose the funding.

A spokesperson says the money was put in an arms length foundation (ALF) "purely to ensure the money previously invested in the college was retained" for its own use.

Further education institutions across the country kept a total of almost £100 million of excess funds in ALFs instead of handing it back to be redistributed across the sector.

Student union NUS Scotland says it's "wrong" for money to sit unused while there are shortfalls in student support and threats of redundancy for lecturers and other staff.

A spokesperson for Fife College said:

“Fife College created an Arm’s Length Foundation in March 2014, purely to ensure that the money previously invested in Fife College was retained for use by the College as opposed to it being lost and returned to the Scottish Government. 

Initially £1.2 million was transferred to the Arm’s Length Foundation in March 2014. 

“The creation of Fife College’s Arm’s Length Foundation was in response to changes made by Scottish Government to the way colleges hold cash reserves and it was set up with the agreement of the Scottish Government and the Scottish Funding Council.

“On an ongoing annual basis, part of Fife College’s funding allocation which we are no longer allowed to spend due to the new accounting regulations, can no longer be retained in the College’s bank account and has to be transferred to the Arm’s Length Foundation as an alternative to being returned to the Scottish Government. In March 2015 this figure was £762,000.

“The Foundation has to be independent of the College with a board of external trustees who are responsible for the funds on an ongoing basis.”